U.S. stock indexes rose Friday morning after the release of fresh inflation data and a better-than-feared earnings report from Nike. The moves come as investors digest signs of continued disinflation, cooling consumer spending, and a cautious stance from the European Central Bank.

Markets Edge Up

At the open, the Dow Jones Industrial Average climbed 165.88 points, or 0.38%, to 43,552.70. The Nasdaq Composite added 75.32 points, or 0.37%, to 20,243.20, while the S&P 500 rose 17.27 points, or 0.28%, to 6,158.29. The Russell 2000 gained 0.24%.

The breadth of the rally remained uncertain, with early data showing no advancing or declining volume at the open. Still, 75.5% of stocks traded above their 50-day moving average, signaling underlying strength.

Core PCE Inflation Persists Above Fed Target

The Federal Reserve’s preferred inflation gauge, the core personal consumption expenditures (PCE) price index, increased 2.7% in May from a year earlier, according to the Bureau of Economic Analysis. That marked the 51st consecutive month core inflation has remained above the Fed’s 2% target. Economists had expected a 2.6% reading, according to FactSet.

Headline PCE inflation came in at 2.3%, matching consensus. On a monthly basis, the core index rose 0.2%, while the overall PCE price index edged up 0.1%.

In terms of consumer behavior, personal income fell $109.6 billion, or 0.4%, in May, while disposable personal income dropped 0.6%. Personal consumption expenditures declined 0.1%, reflecting a sharp pullback in goods spending. The personal saving rate ticked down to 4.5%. Consumer spending, measured by personal consumption expenditures, fell $29.3 billion in May. Total personal outlays, which include interest and transfer payments, slipped $27.6 billion, pointing to broader pullbacks across household finances.

Nike Jumps on Turnaround Optimism

Nike shares surged in early trading after the company reported fiscal fourth-quarter results that beat muted expectations and offered a more optimistic forecast. The stock rallied 13.38% to close at $70.92, while premarket activity showed a further 11.63% gain.

Under new CEO Elliott Hill, Nike is executing a turnaround dubbed “Win Now,” which includes clearing inventory through heavy discounting, rebuilding innovation in core sports categories, and re-engaging with wholesale channels.

Revenue fell 12% to $11.1 billion, better than the $10.72 billion expected. Earnings per share came in at $0.14, slightly above the $0.13 consensus, but well below the $0.99 posted a year earlier. Gross margin declined 440 basis points to 40.3% due to markdowns and a shift toward wholesale.

Nike-owned stores rose 2%, but digital sales tumbled 26%. Wholesale revenue fell 9%, but showed signs of stabilizing ahead of the holiday season. Notably, Nike announced it is reentering Amazon and launching partnerships with Aritzia and Urban Outfitters.

Looking ahead, Nike expects Q1 revenue to decline mid-single digits, with gross margins compressing 3.5 to 4.25 percentage points, including a 1-point impact from new U.S. tariffs on Chinese imports. Management expects this quarter to mark the trough in both revenue and margins.

ECB Holds Rates Amid Divided Council

The European Central Bank left interest rates unchanged during its latest meeting, opting to pause in the face of conflicting pressures. While inflation across the eurozone remains stubbornly above the ECB’s 2% target, economic recovery remains fragile, particularly in the region's southern economies.

ECB governing council member Klaas Knot signaled that rates may need to stay on hold for some time, citing the need for a “stable environment” while monitoring inflation. Some policymakers pushed for hikes to reinforce the ECB’s credibility, but the consensus leaned toward caution.

The central bank’s decision reflects a broader balancing act between inflation containment and economic support. Market participants will be watching future ECB communications closely, as even small shifts in tone could sway currencies and rates across the continent.